to the holders of the capital stock, interest at the rate of 5 per cent. per annum in quarterly payments. The lessor agreed to maintain its organization as a corporation, and from time to time, during the continuance of the lease, upon the request of the lessor to "make, execute, issue, and deliver to the party of the second part the bonds, other obligations, or stock of the said party of the first part, or part bonds, part other obligations, and part stock, as the said party of the second part may request, for such amount and to such extent as may be required by the said party of the second part, for the construction and purchase of locomotives, machinery, cars, and other equipments for said railroad, and for the construction of any extension or branches, or any other railroads, which the said party of the second part may, in the exercise of the rights possessed by, or that may be hereafter possessed by, the said party of the first part under the laws of the State of New York, or otherwise, desire to have constructed, and for all other things, work, or works which the said party of the second part may desire to have done in the exercise of said rights, the cost of which is properly chargeable to construction account. And the said party of the second part shall, during the continuance of this indenture, use and operate the said railroad, and do and perform all acts and things which the party of the first part, as owner of the property and franchises hereby demised, would be bound by law to do and perform had this indenture not been made." The lessee agreed at all times to keep the demised property in repair at its own expense. The lessee entered into possession of the demised property under the lease on the day of its execution, and has ever since been in possession thereof. The lessor owned land adjacent to the land of the plaintiffs, and upon its land had, before the date of the lease, constructed trestlework for the tracks of its road, and the lessee operated the road on and over this trestle-work under its lease for about two years, when it began to fill in the trestle in the rear of the plaintiffs' land, and prosecuted such filling to completion in 1885. This filling made a high embankment so near to the land of plaintiffs that, in the times of rains and melting snow, sand and earth were washed and flowed therefrom upon the land of the plaintiffs, thus causing the damage complained of by them. The embankment was constructed under the direction of the officers of the lessee, and under contract with it. But it charged the cost thereof to the lessor, and the lessor issued and delivered to the lessee its bonds for the payment of such cost, under and in pursuance of the terms of the lease above mentioned.

These are the facts, and there was no dispute about them

upon the trial, and upon them the trial judge charged the jury that the plaintiffs were entitled to a verdict. In this we think there was error. It is conceded liable for inthat the lease was valid, and that the lessee obtained jury. the possession of the property, including the land

Lessor not

upon which the embankment was constructed, and operated and maintained the railroad thereunder. In re New York, L. & W. R. Co., 99 N. Y. 12, 23 Am. & Eng. R. Cas. 43. The lessor was not bound by statute or contract to build this embankment, nor was it bound to keep the trestle in repair. There was no proof or claim at the trial that the trestle was not adequate at the time of the lease, or that it was then a nuisance. The lessee was bound to keep it in repair, and to protect those who had occasion to use it from any injury in consequence of its dilapidated condition. The lessor out of possession was under no such obligation. Wasmer v. Delaware, L. & W. R. Co., 80 N. Y. 216; Edwards v. Railroad Co., 98 N. Y. 245; Ahern v. Steele, 115 N. Y. 203. The lessor of a railroad is not liable for the negligence or torts of the lessee. This has been so frequently decided that an extended citation of authorities is not needed. Pierce, R. R. 283; Ditchett v. Spuyten Duyvil & P. M. R. Co., 67 N. Y. 425; Mayor, etc., v. Twenty-third St. R. Co., 113 N. Y. 311. The lessor cannot be made liable for these damages because it was bound under the lease to issue to the lessee its bonds for the cost of any work chargeable to construction. The work was nevertheless the work of the lessee. It did the work in its own way, and the lessor had no control thereof. In doing the work the lessee was in no way working under the lessor, and in reference thereto, the lessor was in no way the superior of the lessee in such a sense that it was bound to respond for the acts of the lessee. McCafferty v. Spuyten Duyvil & P. M. R. Co., 61 N. Y. 178; Ferguson v. Hubbell, 97 N. Y. 507. This is not a case where the embankment was necessarily a nuisance, and injurious to the plaintiffs. It could have been built with retaining walls or ditches on the sides. thereof, so that the earth and sand from the same could not be washed upon the land of the plaintiffs. We are therefore of opinion that the judgment should be reversed, and a new trial granted, costs to abide event. All concur, except PECKHAM, J., not sitting.

Liability of Railroad Company for Torts of Lessee.-See Briscoe v. Southern Kan. R. Co. (C. C.), 40 Am. & Eng. R. Cas. 599: East Line, etc. R. Co. v. Culberson (Tex.), 38 Am. & Eng. R. Cas. 225; Nugent v. Boston, etc., R. Co. (Me.), 38 Id. 52, note 62; Ricketts v. Chesapeake & O. R. Co. (W. Va.), 41 Id. 42, note 48; Va. Midland R. Co. v. Washington (Va.), 43 `Id. 688.

Liability of Company Operating Road for Injury Where There is no Evidence to Show Lease or Ownership.-In Pennsylvania R. Co. v. Sellers, 127 Pa. St. 406, which was an action against a railroad company to recover damages for personal injuries, it appeared that the injuries were inflicted upon the track and by the engine and cars of another company. There was no direct testimony that the road of such company, was then owned or leased by the defendant; yet, there being evidence of facts and circumstances sufficiently tending to show that the defendant then operated it, it was held not to be error to submit the question of defendant's responsibility to the jury.

Action Against Lessor and Lessee of Railroad-Removal of Cause by one Defendant. In Spangler v. Atchison, T. & S. F. R. Co., 42 Fed. Rep. 305, it was held that an action for a tort against two railroad companies-one a lessor and the other a lessee-being joint and several, may be removed by one of the defendants on the ground of non-residence, though the other defendant is a resident of the same state as the plaintiff.

Consolidation of Railroad Companies-Citizenship-Removal of Cause.Notwithstanding the consolidation of two railroad corporations of different states, each retains its identity as a corporation of the state in which it was originally created; and in a suit against the consolidated corporation brought in one of such states, it cannot obtain a removal to the federal courts on the ground that it is a citizen of the other state, though the consolidation was had under the laws of the latter. Paul v. Baltimore, O. & C. R. Co., 44 Fed. Rep. 513.

Conditional Sale of Stock-Cancellation-Fraud.-Where the original owner of the majority of the corporate stock of a railroad company transferred his stock to another, on the condition that the latter should negotiate him a loan and have him elected president of the company, and after the offer of the purchaser to make the loan he declined it, and violated his trust as president by endeavoring to sell the stock sold by him to such purchaser to a competing line, whereupon he was not re-elected president, such purchase will not be set aside at the suit of the personal representative of the seller, on the ground that the purchaser did not comply with the conditions of the sale, although the latter made sham sales of the stock to third persons in the fear that his purchase might be set aside. Healey v. Loveridge (Md.), 19 Atl. Rep. 921.

Personal Liability of Stockholders-Claims for Labor in Construction of Road-Sufficiency of Complaint.-Under Rev. St. of Ind. 1881, Sec. 3934, which makes stockholders in a railroad corporation individually liable to laborers for all labor done in the construction of the railroad which shall remain unpaid after the assets of the corporation shall have been exhausted, a complaint which alleges that the plaintiffs are the holders of unsatisfied judgments against an insolvent railroad company and which seeks the recovery of the personal judgment against the defendants to the action, who are alleged to have subscribed to the stock of said corporation, and to have been stockholders therein at the time the several debts due the plaintiff's were incurred, fails to state a good cause of action, in the absence of any averment that the defendants, as subscribers to the stock, are indebted for unpaid balances, or that the plaintiff's claims were for labor done in the construction of the road. Toner v. Ferguson, 125 Ind. 224.

Penalty for Failure of Railroad Company to Make Report-Right of Private Party to Sue for Penalty.-The penalty to which a railroad company is liable under Code N. Car., § 1960, which says that any railroad corporation failing to make an annual report to the Governor, as required by § 1959, shall be liable to a penalty of $500, to be sued for in the name of the state, is recoverable only by the state and a private person can have no interest in it, although § 1212 enacts that when the act imposing a penalty does not

provide "to what person the penalty is given, it may be recovered by anyone who will sue for the same and for his own use.' Under Const. N. Car. Article 9, § 5, this penalty should be paid to the school fund. State ex rel. Hodge v. Marietta & N. G. R. Co. (N. Car. Supreme Court, March 25, 1891), 12 S. E. Rep. 1041.

Parol Agreement by Contractors to Assume Debts of Company-Evidence to Establish Contract. In a suit upon an alleged parol agreement by failroad contractors to assume the debts of the railroad company, the defendants denied making the agreement, and two of the company's directors, who were present at the meeting at which said agreement was alleged to to have been made, corroborated their testimony. Two other directors and the secretary of the company testified that the agreement was made. Shortly after said meeting, one of the defendants wrote a letter to the secretary of the company, in which he questioned the correctness of a statement of the company's debts, and promised to refer it to defendant's agent, but did not deny their liability for the debts. Held, that the evidence was sufficient to establish the contract. Lookout Mountain R. Co. v. Houston, 44 Fed. Rep. 449.

Malicious Prosecution by Railroad Company for theft of Ties-Probable Cause. In an action of P. K. against the C. B. & Q. Ry. Co. for malicious prosecution in the arrest and trial of the plaintiff for the larceny of railroad ties, on the oath and evidence of B. F. P., the agent of defendant, held that, if from the evidence the agent had reasonable ground for suspicion, supported by circumstances sufficiently strong in themselves to warrant a cautious man in the belief that the accused was guilty of the offense, and that the agent believed that he was guilty, then there was probable cause for the prosecution of the accused, and therefore malice was not to be presumed on the part of defendant, or its agent. The court below having so instructed the jury upon the trial, and the evidence clearly warranting the instructions given, and the jury having returned a verdict for the plaintiff, held error in overruling the defendant's motion for a new trial. Chicago, B. & Q. R. Co. v. Kriski (Neb. Sept. 17, 1890), 46 N. W Rep. 520.

Service of Process on Authorized Agents-Subsequent Appointment of Receiver.--In Simpson v. East Tennessee, V. & G. R. Co. (Tennessee, November, 1, 1890) 15 S. W. Rep. 735, it was held that where, in an action against a railroad company, there has been service of summons on an agent duly appointed by defendant, who had never been discharged, it is no ground for a plea in abatement by the railroad company, that, since the appointment of such agent, the railroad had gone into the hands of a re

ceiver.

Service of Process on "Regular" Ticket Agent-Defective Returns.-In Tallman v. Baltimore & R. Co., 45 Fed. Rep. 156, it was held that under Rev. St. Ohio, § 5044, which provides that process against a railroad company may be served upon any regular ticket or freight agent thereof, a return that the summons was served upon a "ticket agent or general agent of the defendant, is defective, since it does not show that the person upon whom the process was served was a regular" ticket agent.

"

Residence of Railroad Company-Absence of President from State-Resi-, dence of Vice President.-Under Civil Code Prac. Ky., § 73, providing that an action against a common carrier, whether a corporation or not, for an injury, must be brought in the county in which the defendant resides, etc., and § 732, subsec. 33, providing that "the chief officer or agent of a corporation, which has any of the officers or agents herein mentioned, is (1) its president (2), its vice-president, * the residence of a railroad corporation which has no president in the state is determined by the residence of its vice-president, there being one in the state. Harper 7. Newport News & N. V. R. Co. (Kentucky, September 9, 1890), 14 S. W. Rep. 346.

* *

Contract to Make Up Deficiency in Earnings-Specific Performance.-A contract by one railroad company to advance money to make up any deficiency of the net earnings of another railroad company to pay interest on its bonded indebtedness, will not be specifically enforced where the obligation to repay such advances would arise upon demand.

Same Same Insolvency of Company.-The unforeseen insolvency of a railroad company is a sufficient reason for denying the specific performance of a contract by one railroad company to advance money from time to time to make up a temporary deficiency in its net earnings to pay interest on bonded indebtedness.

Same-Same-Accounting-Equity Jurisdiction.-Equity has no juris diction on the ground that an accounting is necessary of a suit to enforce a contract to make up the deficiency in the amount of the net earnings of a railroad company to pay interest on its bonded indebtedness, where the plaintiff company alleges that there have been no net earnings and the complaint asks for the full amount of the interest.

RUGER, C. J. and FINCH, J., dissent.

APPEAL from judgment of the General Term of the Supreme Court, First Department, affirming a judgment of the lower court in favor of plaintiffs in an action brought to compel specific performance of an agreement to loan money.

On March 12, 1883, the plaintiff and defendant companies entered into an agreement by which the Eldred Company agreed to deliver to the Erie Company for transportation all the freight and passengers which it could lawfully control or influence destined to points reached by the Erie Company or its connections, and to deposit with the Erie Company a majority of its own capital stock, while the Erie Company agreed to use its influence and exercise its control to promote the interests and business of the Eldred Company and to make good any deficiencies in the net earnings of the Eldred Company to meet the interest on its bonded indebtedness from time to time, as the same became due and payable, for which advances the Erie Company was to have a first lien on the Eldred road and franchises next after the bonded indebtedness, and also a first charge upon its surplus earnings next after payment of accruing interest on the bonded indebted

ness.

This action was brought to compel specific performance of